Conduct risk and Foreign exchange forward contract: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Layout.)
 
imported>Kmacharla
No edit summary
 
Line 1: Line 1:
''Corporate governance and risk management''
A transaction which solely involves the exchange of two different currencies:


1.
  (i) on a specific future date
  (ii) at a fixed foreign exchange rate which is pre-agreed at the outset of the contract.


The risk that an organisation or an individual may behave unethically, illegally, or contrary to the organisation's or the market's codes of practice.
Foreign exchange forward contracts are used - among other purposes - for hedging forward foreign exchange exposures.
For example known or likely future currency receivables and payables.


They are priced by adjusting the spot foreign exchange rate to reflect the interest rate differential between the two currencies involved for the forward period.


2.


The adverse consequences of such a breach.
Also known as a Forward foreign exchange contract, or a Foreign exchange forward.


 
== See also ==
<span style="color:#4B0082">'''''$375bn in conduct fines'''''</span>
* [[Hedging]]
 
* [[Non-deliverable forward]]
:"Conduct risk is now systemic in scale.
* [[Synthetic]]
 
:In the past five years, banks globally have paid some $375bn in conduct fines, and misconduct has damaged trust in financial services.
 
:Identifying malpractice techniques is the essential first step to forestalling them, in particular if there is a limited core group of identifiable practices."
 
 
:''The Treasurer magazine, September/October 2017, p37 - Gerry Harvey, chief executive of the FICC Markets Standards Board (FMSB).''
 
 
==See also==
* [[ACT Ethical Code]]
* [[Code of conduct]]
* [[Code of practice]]
* [[Conduct]]
* [[Corporate governance]]
* [[Financial Conduct Authority]]
* [[FMSB]]
* [[Front-running]]
* [[Layering]]
* [[Market corners]]
* [[Ramping]]
* [[Risk management]]
* [[Spoofing]]
* [[Squeeze]]
* [[Wash trading]]

Revision as of 12:36, 5 December 2012

A transaction which solely involves the exchange of two different currencies:

 (i) on a specific future date
 (ii) at a fixed foreign exchange rate which is pre-agreed at the outset of the contract.

Foreign exchange forward contracts are used - among other purposes - for hedging forward foreign exchange exposures. For example known or likely future currency receivables and payables.

They are priced by adjusting the spot foreign exchange rate to reflect the interest rate differential between the two currencies involved for the forward period.


Also known as a Forward foreign exchange contract, or a Foreign exchange forward.

See also